Scott Muxen says that he has routinely watched roomfuls of project managers, contractors and subcontractors squeeze weeks — even months — out of already tight hospital construction schedules. “Remember, these are people who as often as not can be at each other's throats,” says Muxen, vice president of business development at San Francisco-based Herrero Contractors Inc.

Muxen says there is no magic involved in getting often-antagonistic parties to cooperate. Instead, Herrero uses a simple concept, called “lean,” which was first used on a large scale by Toyota Motor Corporation. “We formally call it ‘lean project delivery,' and it relates to the entire project model — from design and permitting to the construction process and the closeout to how you work with a client. Say we have a scheduling session that starts with the milestones we have to achieve contractually. In the lean version of the session, we don't just have the project managers and contractors in the room. We also pull in all of the subcontractors and have them tell us what it will take for them to help us meet our schedule.”

This, says Muxen, is where lean's different approach comes in: “We start at the end of the schedule, not at the beginning, and then work our way back. Each subcontractor tells his upstream supplier what he needs and when. They directly negotiate hand-offs with each other. At the end of such a session, with everybody clear on wants and needs, I've seen us pull up to two months out of a strict schedule.”

But lean is more than just an unusual take on how to run scheduling meetings. It's a coherent business philosophy that Muxen says is based on five simple, interlocking principles. “The first principle is ‘directly observe work and the activities, connections and flows that constitute it.' Work is not a task, it's an activity designed to create value and it's connected to other similar activities. At Toyota , when there is a problem, managers do not rely on second-hand accounts, they go directly to the site and observe.”

The second principle is the systematic elimination of waste. “An example might be a situation where you have an employee who always delivers 16 architectural drawings because that's the way he's always done it or been expected to,” Muxen says. “But it may turn out that the person he's doing them for only needs three. The resolution of that situation is directly connected to the third principle, ‘establish high agreement of what and how.' Understand what each person or group needs from the upstream supplier. In the example here, where one person is supplying way too many drawings, the person he's supplying might say, ‘I only need three, but I want them to look like this and contain this kind of information, and I'll need them by such-and-such a date.' The drawer might say, ‘I can do that, but I will need this much time or this kind of assistance from you.' Both parties emerge from the negotiation in ‘high agreement,' with their goals and needs explicitly stated.”

The fourth principle, systematic problem solving, uses U.S. economist Arthur Deming's famous PDCA loop: plan, do, correct, analyze.

“As problems arise, we address them in such a way that we can carry forward the lessons we learn from solving them,” Muxen says. “We correct whenever we see that something we've planned and done has gone wrong and we have to figure out a way to solve it. When we analyze, we document the process by systematically boiling things down to one sheet of A3 paper. We capture and retain that knowledge in a simple document where we identify what the problem was and our approach to it, and what trade-offs we had to make.

“The desire to carry knowledge forward leads to the fifth principle, which is ‘create a learning organization,' one in which hard-won knowledge is remembered, incorporated and used. In U.S. business culture you have the case of high flyers who make great presentations and advance quickly in a company, but lack the knowledge base of the people who are going to have to do the real work. At Toyota , you cannot advance until you have learned every part of the organization and the work that its people do. At that point you're more of a teacher than an administrator.”

Herrero, which does between 50 percent and 75 percent of its business building health care facilities, first heard of lean when Sutter Health decided it wanted its contractors to take a lean approach in its construction of $6 billion worth of capital improvements. The company could have gone “temporarily lean” to please Sutter, but its chairman and CEO Mark Herrero realized that lean presented an opportunity to shift the company's work culture.

“We spent a year investigating lean project delivery, then made the declaration that we are a lean enterprise,” Herrero says. “We're unique among our peers in that we didn't go lean just for Sutter but went completely lean in all of our projects, health care-related or not.”

Herrero plunged into the lean movement, and it was at a Lean Construction Institute meeting in Salt Lake City several years ago that he met Muxen, who was then working for Southland Industries. Since then, Muxen, who came to work for Herrero in late 2006, says he is not sure if lean is accepted among other companies, “although it is catching on in the construction industry in general. We remain involved in organizations, such as LCI, where we will present papers and discuss the ins and outs of particular projects.”

Herrero says his company is open to discussing its lean experiences. “An Oregon construction company has approached us to do just that. We've also entered into collaboration with Boldt, a Wisconsin-based lean construction firm, to go after larger projects of all kinds in California .”